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Budget Requests $693 Million Higher Than Projected Revenues
By Wisconsin School Administrators Alliance staff | November 22, 2016
From WisPolitics.com . . .
The Walker administration warned yesterday state agencies won’t get all the new money they sought for 2017-19 given spending requests came in $693 million more than expected revenues for the next budget.
Meanwhile, projected revenues for the remainder of the current budget, which ends in mid-2017, continued to drop due to worsening corporate tax collections, according to the DOA report released today.
Spending requests have regularly come in above expected revenues in the DOA report, which serves as the foundation for the guv’s budget proposal to come early next year. Two years ago, agency wish lists came in $2.2 million above expected revenues for 2015-17.
DOA Secretary Scott Neitzel said the Department of Public Instruction, which is under the direction of Superintendent Tony Evers, and the Department of Health Services, which includes Medicaid, account for a significant chunk of the requested spending increase.
“As has been the practice in the past, not all agency requests will be included in the final budget,” Neitzel wrote.
Overall, the state expects nearly $1.4 billion in revenue growth for 2017-19. The agency spending requests exceed revenues by $250.2 million in the first year of the biennium and $442.8 million in the second.
State Budget Director Waylon Hurlburt said a drop in expected corporate tax collections drove the downward revision for revenue estimates over the remainder of the current budget.
In January, the Legislative Fiscal Bureau projected the state would take in more than $15.6 billion in general fund taxes for 2016-17. That included just more than $1 billion in corporate taxes.
The report DOA released yesterday dropped the revenue estimate for the current fiscal year to just over $15.4 billion. That includes a new estimate of $888.5 million in corporate tax collections for 2016-17.
Hurlburt noted the state will see a new report on quarterly corporate tax collections in December.
“Other states are experiencing a similar if not more dramatic reduction in estimated collections,” he said. “Wisconsin has seen years when the first quarter of corporate collections were down and collections rebounded before the close of the fiscal year.”
With the revised tax collection estimates, the Walker administration is now expecting a gross balance of $104.8 million to finish the 2015-17 biennium on June 30.
At the close of the legislative session, LFB had projected a gross balance of $237 million.
While tax collection projections have dropped, the Walker administration also has been able to cut state expenses for the biennium below previous projections.
Rep. Gordon Hintz, D-Oshkosh and a member of the Joint Finance Committee, knocked the Walker administration on that front, noting the Walker administration also delayed paying off some state debt as part of its cost saving measures.
“There’s some smoke and mirrors being used by the administration to hide the fact our growth is not meeting what the assumptions in the budget were,” Hintz said.
See today’s DOA report here.
See Wisconsin State Journal coverage here.
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